Six public universities, amongst them the University of Nairobi, JKUAT and Kenyatta University are set to lose some of their key properties as a result of failure to remit retirement deductions, Business Daily reports.
Retirement Benefits Authority (RBA) Chief Executive Officer Nzomo Mutuku stated on Tuesday that they have reached an agreement with the heads of the affected universities and they have agreed to cede some of their property to settle the outstanding Ksh8.4 billion estimated arrears.
This agreement comes in the heels of a warning by RBA in May that public universities risked losing some of their prime properties if they failed to settle their outstanding arrears.
"We have met with vice-chancellors of all the affected universities on remedial plans, in some cases where they have high liquidity challenges they have agreed to transfer some noncore assets like building to the particular schemes," Mr. Nzomo is quoted.
In June of 2019, Education CS Prof George Magoha refused to bail the universities out of the debts that they owed occasioned by the failure to submit statutory remittances and only agreed to help settle the Ksh 8.1billion owed to KRA, inadvertently setting the foundation stones for the tumbling house of cards that the universities have to deal with now.
The law allows for only six years for the institutions to clear any outstanding arrears, which forces the universities to offload some of their assets to avoid penalties.
Public universities have over the last few years found themselves in uncharted waters with a dip in the number of students, given the scrapping of parallel degrees which were major cash cows to the universities.
The government's initiative to introduce funding depending on the courses offered only served to pile more woes on the heads of the universities.
Ballooning wage bill is just another of the major griefs that the already overburdened higher education sector is dealing with.
In July 2019, UNIVERSITY STAFF ASSOCIATION ( UASU) had threatened to take universities to court over the failure to remit agency fees that it collects on its behalf.
The union lamented that despite signing recognition agreement and collective gain agreements (CBAs) the universities chose to violate Section 50 of the Labour Relations Act 2007 and Articles 41, (2) (4) and 47 the Constitution by failing to remit the dues and agency fees.
